Canaccord cost reduction and Private Client strategy
01 Avril 2009 - 8:00AM
UK Regulatory
TIDMCCI
Canaccord announces significant cost reduction and implementation of Private
Client Services strategy
VANCOUVER, March 31 /CNW/ - Today, Canaccord Capital announces a broad
program of initiatives, activities and investments designed to lower its
breakeven, modernize its compensation structure and ensure the efficiency of
its corporate operations. This program is expected to reduce annual costs by
an estimated $15 million while ensuring that Canaccord remains both focused on
client service and well positioned for future growth. These cost reductions
are in addition to the cost reductions discussed in the Q3/09 earnings release
on February 12, 2009, which were expected to be $20 million on an annualized
basis.
"Canaccord is a resilient and resourceful organization, with a solid plan
in place for the future," said Paul Reynolds, President and CEO of Canaccord
Capital Inc. "We believe our goals of lowering our breakeven, modernizing our
compensation structure and ensuring the efficiency of our operations are
critical to our continued success."
Some details of this program include: further consolidation of back
office support in a number of geographies; changes to securities processing;
the deferral of certain reward programs and events; controlling the costs of
underutilized professional licenses; and, additional cost reductions in the
global research group. Canaccord has also begun the process of reengineering
its compensation structure, including adjusting its product payouts, deploying
a long-term retention program in the Private Client Services division and
orienting Canaccord Adams compensation toward global profitability.
In addition, Canaccord is announcing a significant strategic initiative
in its Private Client Services group. The group has been reduced by
approximately 75 Investment Advisors, largely through the Canaccord Advisor
Transition (CAT) Program, which also provides bridge financing for the
Investment Advisors acquiring the departing brokers' client relationships.
"This difficult decision was taken in order to support our commitments to
prioritizing our clients, to recruiting Investment Advisors with larger books
of business and to continuing to grow our asset base," explained John
Rothwell, Head of Private Client Services. "It is by no means a permanent
staff reduction, but a demonstration of our diligence, responsiveness to
market opportunity and commitment to client service."
While some of these benefits will be realized immediately, others will be
realized over the next 90-120 days. Additional details will be available in
conjunction with our year end results scheduled for release on Wednesday, May
20, 2009.
Caution regarding forward-looking statements
This document may contain certain forward-looking statements. These
statements relate to future events or future performance and reflect
management's expectations or beliefs regarding future events including
business and economic conditions and Canaccord's growth, results of
operations, performance and business prospects and opportunities. Such
forward-looking statements reflect management's current beliefs and are based
on information currently available to management. In some cases,
forward-looking statements can be identified by terminology such as "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential", "continue", "target", "intend" or the negative of
these terms or other comparable terminology. By their very nature,
forward-looking statements involve inherent risks and uncertainties, both
general and specific, and a number of factors could cause actual events or
results to differ materially from the results discussed in the forward-looking
statements. In evaluating these statements, readers should specifically
consider various factors that may cause actual results to differ materially
from any forward-looking statement. These factors include, but are not limited
to, market and general economic conditions, the nature of the financial
services industry and the risks and uncertainties detailed from time to time
in Canaccord's interim and annual consolidated financial statements and its
Annual Report and Annual Information Form filed on sedar.com. These
forward-looking statements are made as of the date of this document, and
Canaccord assumes no obligation to update or revise them to reflect new events
or circumstances.
ABOUT CANACCORD CAPITAL INC.:
Through its principal subsidiaries, Canaccord Capital Inc. (TSX & AIM:
CCI) is a leading independent, full-service investment dealer in Canada with
capital markets operations in the United Kingdom and the United States.
Canaccord is publicly traded on both the Toronto Stock Exchange and AIM, a
market operated by the London Stock Exchange. Canaccord has operations in two
of the principal segments of the securities industry: capital markets and
private client services. Together, these operations offer a wide range of
complementary investment products, brokerage services and investment banking
services to Canaccord's private, institutional and corporate clients.
Canaccord has 31 offices worldwide, including 24 Private Client Services
offices located across Canada. Canaccord Adams, the international capital
markets division, has operations in Toronto, London, Boston, Vancouver, New
York, Calgary, Montreal, San Francisco, Houston, and Barbados.
For further information: North America Media: Scott Davidson, Managing
Director, Global Head of Marketing & Communications, Phone: (416) 869-3875,
email: scott_davidson(at)canaccord.com; For investor relations inquiries
contact: Katherine Young, Vice President, Investor Relations, Phone: (416)
869-7292, email: katherine_young(at)canaccord.com; London Media: Bobby Morse
or Ben Willey, Buchanan Communications (London), Phone: +44 (0) 207 466 5000,
email: bobbym(at)buchanan.uk.com; Nominated Adviser and Broker: Marc Milmo or
Dugald J. Carlean, Fox-Pitt, Kelton Limited, Phone: +44 (0) 207 663 6000,
email: marc.milmo(at)fpk.com
(CCI)
END
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